Editorâs note:Â Andrew Torba, a bitcoin fan and CoinDesk contributor, shares his insight into the relationship between litecoin and bitcoin. Article originally published on medium.com.
Itâs been an exciting week for bitcoin and litecoin. At the time of writing, bitcoin was up 4.36% in one hour alone, topping off at $944.99 on Mt.Gox. In terms of growth over the past month, Litecoin is off the charts: surging from $4 at the beginning of November to a new high of $16.86.
In trading, this is whatâs known as a âsympathy playâ. This term is used when a stock, or in this case a digital currency, follows another stockâs path.
As a rule, sympathy plays tend to lag behind the main play, so itâs likely that we will see litecoin piggyback on bitcoinâs recent success. This could either stabilise bitcoin, or it could potentially slow down its growth.
Iâve been following litecoin closely since October and I think itâs safe to say that litecoin is experiencing its shining moment. Max Keiser agrees:
Litecoin ($12) is up more than 100% since we recommended it last week. We are sticking to our $50 interim target.
â Max Keiser (@maxkeiser) November 25, 2013
People are speculating that litecoin may be âthe silver to bitcoinâs goldâ. Some argue that as bitcoinâs value rises over time, smaller currencies will become more common for everyday transactions.
Think of litecoin as the change in your pocket, and bitcoin as your large assets and savings. The biggest argument from the bitcoin community against litecoin is that bitcoinâs ability to be broken down into uBTC (fractional pieces of one bitcoin) may render litecoin obsolete.
Of course, this will only happen if the world selects bitcoin as its digital currency of choice. I see a future where multiple digital currencies are being utilised by different parts of the world. Maybe Iâm right, maybe Iâm wrong, but what would need to happen for litecoin to gain traction?
As adoption increases, you can see quickly where microtransactions become important in daily life.
At the time of writing, there are over 1,060 merchants currently listed on the coinmap.org website that accept bitcoin. The site is adding roughly 50-100 new merchants each day.
Coinmap is an important resource: check it out and support your local bitcoin businesses. As litecoin continues to grow, more exchanges will take it on, specifically Mt.Gox and Coinbase.
When this happens, expect to see massive growth in both litecoin and bitcoin. Adoption by these exchanges will also make it easier for merchants to start accepting litecoin.
Many of the businesses listed on coinmap.org already utilize Coinbase for transactions, including the Subway owner I visited last week, so it would take only one app update for litecoin merchant adoption to be instantaneous.
Recently, I even found a local guitar shop that accepts bitcoin. I will be visiting later this week to get the ownerâs thoughts on both bitcoin and litecoin.